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Washington Update | Trump's "Big Beautiful Bill" Is Here

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On July 4, President Trump signed into law a sweeping budget bill passed by the House and Senate, delivering on multiple Republican policy goals. Here are the biggest changes to healthcare programs.

Medicaid Overhaul

Spending Cuts: The bill slashes Medicaid funding by $1.3 trillion over 10 years

Coverage Loss: An estimated 8.7 million people are projected to lose coverage—about 10% of total enrollees

Hospital Impact: Medicaid payment reductions will average 18% nationally, with state-level variability, leading to an expected $443 billion increase in uncompensated care costs for hospitals

Key Provisions

- Work Requirement: Starting in late 2026, able-bodied adults must meet work requirements to qualify (some exceptions apply)

- Provider Tax Cap: Capped at 3.5% by 2028—reducing states' ability to fund Medicaid expansion

- Payment Rate Cap: Limits state-directed payments to 100% of Medicare rates

Affordable Care Act (ACA) Changes

Enhanced ACA subsidies will expire in 2026

Enrollment will get harder:

- Shorter open enrollment period

- Fewer special enrollment options

- Annual eligibility checks

Coverage loss: CBO expects 3M fewer people with ACA plans.

Medicare Adjustments

Temporary Physician Fee Bump: A 2.5% increase to the Medicare Physician Fee Schedule in CY2026

Orphan Drug Carve-Out: Orphan drugs for multiple rare diseases are excluded from Medicare drug price negotiation rules

Savings Program Delay: Implementation of a rule aimed at easing Medicare Savings Program enrollment is postponed until 2034

New Rural Health Initiative

$50 Billion Fund: A new Rural Health Transformation Program will support rural providers and state-level rural health initiatives

Student Loan Policy Changes (Impacting Healthcare Trainees)

Graduate PLUS Loans Eliminated.

Lifetime Borrowing Caps:

- $100K for graduate students

- $200K for professional students (e.g., medical, law)

- Annual cap set at $50K

Read a full breakdown of these changes from KFF